The government has decided to manufacture and procure 98 new
locomotives including 29 electric ones at a cost of Rs125.4 billion, mainly with
the financial and technical support of China.

Official sources said on Thursday that the Planning
Commission of Pakistan had okayed two locomotive projects of the Ministry of
Railways and put them on top priority list.

The manufacturing and procurement of 69 locomotives would
cost Rs121 billion and its Foreign Exchange Component (FEC) would be Rs64
billion. China and some other countries, as well as international donor
agencies, are expected to offer assistance for the project.

The project will be taken up in 2001-2002 and completed by
2004-2005. Pakistan Railways is the sponsoring agency of the project. The
Pakistan Railways intends to procure/manufacture 2000 Horsepower and 3000hp
locomotives in its locomotive factory at Risalpur, installed in collaboration
with Japan.

It has rated capacity to manufacture 25 locomotives of 2000hp
or 3000hp on single shift basis.

It has manufactured or assembled 23 locomotives of 2000hp and
is currently engaged in assembly/manufacture of 3000hp locomotives.

The other project is the procurement of 29 electric
locomotives which would cost Rs4.4 billion and its FEC is Rs2 billion. The
project will be taken up in 2001-2002 and will be completed in 2003-2004.

The Pakistan Railways has a fleet of 29 electric locomotives
of 3000hp working on Lahore-Khanewal section of 286km. The section was
commissioned in 1969. These locomotives of British origin have completed more
than 30 years of age.

The spare parts, especially of electronic components, are not
manufactured anywhere in the world. As such these locomotives remain out of
order. The Planning Commission is of the view that the possibility of
manufacturing these locomotives in Pakistan Railways' factory can also be looked
into.

Karachi water projects approved

The Executive Committee of the National Economic Council
approved on Monday Rs8 billion Greater Karachi Water Supply Project phase-V, and
Water Loss Reduction and System Strengthening Project for the city.

The Ecnec meeting, which was presided over by Finance
Minister Shaukat Aziz, was of the view that water shortage in Karachi was needed
to be removed by completing various projects as early as possible.

The water supply project will offer additional 100 million
gallon per day (MGD) to the city. The meeting approved a number of projects
including Roll Back Malaria Programme involving a new approach to malaria
eradication costing Rs253 million. It was decided that provinces would fully
participate in the project to make this new approach result-oriented.

The Ecnec also approved setting up of 4MW hydel power station
at Juglote Gah in Northern Areas at a cost of Rs290.2 million.

Economic growth to remain sluggish: ADB

Pakistan's economy is crawling towards recovery but growth is
expected to remain sluggish over the next two years with further debt relief
"critical," the ADB said on Thursday.

Spurred by improvement in agriculture and a modest
acceleration in industry, the economy showed real GDP growth of 4.8 per cent
last year from 3.1 per cent in 1999, according to the bank's regional outlook.

It said there was a strong recovery in construction and
faster growth in the electricity and gas sectors, which pushed industrial growth
to three per cent in 2000, from 2.5 per cent.

Various reforms agreed this year with the IMF were expected
to boost investor confidence, it noted.

Under an IMF standby facility worth 596 million dollars,
Pakistan is committed to reduce fiscal deficit to 5.2 per cent of GDP in 2001
from 6.5 per cent last year.

Sick units sale

The power utilities WAPDA and KESC have demanded share from
the sale proceeds of around 868 private sector sick industrial units the
Corporate and Industrial Restructuring Corporation (CIRC) starts selling this
month.

"WAPDA and KESC, being the utilities of national
importance, be given top priority for giving share from the sale proceeds of the
sick units against the outstanding bills," said chairman WAPDA Lt-Gen
Zulfiqar Ali Khan, in a letter to the federal finance secretary.

SMEDA to open office in Sialkot

The Small and Medium Enterprise Development Authority (Smeda)
has planned to set up its office at Sialkot to promote small and medium
businesses in the area, officials told on Tuesday.

"We are actually working on a plan to encourage clusters
of SMEs in the three districts of Sialkot, Wazirabad and Gujrat," the
officials said. They said the authority planned to develop a "triangle of
these districts with clusters of the SMEs."

Maladies hit $8bn SAP working: study

The US$8 billion worth of Social Action Programme (SAP) is
suffering from poor planning and budgeting, lack of trained staff, absenteeism,
inadequate and unreliable supplies of key inputs needed to maintain service
quality, faulty construction, and weak monitoring, a mid-term final review
report of SAP-II reveals.

The report, financed by the United Kingdom Department for
International Development, has also identified a number of problems in the
social sectors like deficiencies in implementation, flaws in the design, poor
governance, and insufficient efforts in social services.

The SAP is a national programme launched in 1992-1993 which
was redesigned to coincide with the Eighth Five Year Plan. Seventy-five per cent
of the total amount for SAP was to be provided locally and remainder from
foreign assistance.